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Stanford CS007: Personal Finance For Engineers

1089 points by destraynor 9y ago

manu-chroma 9y ago
No lecture videos on the link. Just the slides for now.
- e40 9y ago
  That's too bad. So other item courseware have videos?
aerovistae 9y ago
Why is there nothing for lecture 9: Real Estate? That was the one I wanted to read.
- jvehent 9y ago
  Because real estate is an illusion when you live in the Bay area?
- bdz 9y ago
  Not happened yet? >The next seminar will be on Tuesday, November 28th at 4:30pm in Building 200, Room 034.
  - aerovistae 9y ago
    i don't read so well apparently
- kbart 9y ago
  Maybe because it wasn't recorded yet? Check again in few days. "The next seminar will be on Tuesday, November 28th at 4:30pm in Building 200, Room 034."
wil421 9y ago
I think this is really great but IMHO college is too late for this. Personal finance should be taught in middle and high schools just like health classes. When I was 18 and a freshman in college I saw some crazy decisions including using student loans to put a down payment on a car or taking out private loans for spending money.
- d3ad1ysp0rk 9y ago
  I agree that basic financial ideas should be taught in high school, but people aren't always ready for a deep dive until they've started to be more independent.
  - deleted 9y ago
    [deleted]
- mstade 9y ago
  Absolutely this. We were actually taught basic finances, cooking, cleaning etc when I was in elementary school. They called it "hemkunskap" which literally translated to "home knowledge". I used to think it was useless then, except maybe for the cooking classes – I enjoyed those – but I can trace back A LOT of my deeply rooted knowledge for personal finances and other home skills to those classes. For instance, I moved away from home at age 15 to attend high school in a different town, and all of a sudden I had to deal with a bunch of things I never had to care about before, like weekly budgets and what not. Right then it dawned on me just how useful those classes actually were, and they really did help me out a lot. I wish this had been a staple class throughout my entire stay in school. A lot of the stuff will be repetitive, but that's what it means running a home and a life – a lot of chores that you keep doing over and over, some maybe you'll optimize like hiring a cleaner (after working out it fits your budget!) or investing in technology that just makes things easier. As you grow older, the classes would obviously need to become more advanced, but I think this would go a long way to make kids much more capable to deal with real world problems, and there's a lot of cross over with other subjects as well. I don't know if schools still do this, but when I went to elementary school we had wood working and/or sewing class. I enjoyed those, but we had those for way longer than we had home skills class, and it seems to me these three could be successfully combined.
amsb 9y ago
Fantastic set of topics! As an engineering undergrad at UC Davis, I took a course in engineering law which was incredibly helpful. It's great to see a course in personal finance for engineers. As an entrepreneur building financial services for STEM professionals, I see a distinct opportunity to educate this demographic. While financial education for all demographics is desperately lacking in the US, the STEM crowd has the mathematical training to be presented with a more rigorous treatment of the topics. Moreover, STEM professionals quite often have compensation packages that include complex financial arrangements (e.g. deferred comp.) and/or derivatives (e.g. options) that are difficult to value and/or manage.
shubhamjain 9y ago
Is there any significant benefit of thinking tens of long-term/short-term goals and planning, and managing different funds for them (emergency, travel, house, card, kid's college education..). Why not just have a 1-2 funds to dump your savings in and be smart about withdrawing from it? One could consist of conservative investment vehicles, other could have more aggressive ones.
- astura 9y ago
  Yes. It makes your funds easier to keep track of (what did you spend your money on?) and it makes overspending very difficult (without noticing). I keep different buckets of money in different accounts with auto deposit.
- davidcbc 9y ago
  Because when you've got one big savings account it is a lot easier to look at it and say "Oh! I can afford a new car now!" and cash out your entire savings on one thing without taking the other things into account. Having different accounts for different goals keeps a clean separation of concerns. When your car account has enough to buy a car then you can buy it and know you aren't taking away from what you have planned for your kid's college education. If you decide to take money from one account to pay for something else you have to actually think about what you are doing and are more aware of the trade offs.
  - jk563 9y ago
    I've found de-coupling to be the key to altering this sort of behaviour. The balance of my savings and investment accounts are separate from my budgeting. I allocate funds at the budget level, the balance of my various accounts being a secondary concern.
- 50CNT 9y ago
  Subdivision like that usually happens when you go from a less complex organic system to something more engineered. Compare this to just running programs, to having 27 different VMs running on a baremetal hypervisor. That serves to subdivide complexity to make it more manageable.
asafira 9y ago
Question for hackernews: where did everyone else learn about this stuff? Going through the material, I found I already knew 50-75% of it, but from bits and pieces of information I learned over the years, not one consolidated place. Is it the same for others?
- The_Hoff 9y ago
  Go into it with a grain of salt, but https://reddit.com/r/personalfinance https://reddit.com/r/personalfinance is a good resource. The sidebar and recurring themes in posts are really useful. Additionally https://bogleheads.org/wiki/Main_Page https://bogleheads.org/wiki/Main_Page is a good starting place for putting together an investment portfolio.
- ryanwaggoner 9y ago
  I read a bunch of books on personal finance (of mixed quality) in high school and college, and I also took actual finance classes in college, which help with concepts like compound interest, present / future value, etc.
  - sslash 9y ago
    Do you have any particular books to recommend? I've read Money by Tony Robbins. Good book, even though the guy himself is a little too much for me
    - walshemj 9y ago
      The intelligent investor by benjamin graham - Warren buffets mentor
    - davidddavidson 9y ago
      The Bogleheads Guide to Investing
    - sn9 9y ago
      Ramit Sethi's I Will Teach You to be Rich.
amelius 9y ago
Here's an interesting idea, a game environment for testing/building one's personal finance skills: https://challenges.openideo.com/challenge/financial-empowerment-challenge/ideas/the-sims-personal-finance-life-simulation https://challenges.openideo.com/challenge/financial-empowerm...
- neves 9y ago
  I liked the idea. Does anybody here know about an implementation? I'd like to show it to my sons. BTW, any idea to teach financial info to 11 years old children?
- corpMaverick 9y ago
  Perhaps one where you do bootstraping ? https://en.wikipedia.org/wiki/Bootstrapping_(statistics) https://en.wikipedia.org/wiki/Bootstrapping_(statistics) And you get to see the effects of random life events. You get cancer, you are laid off, you sell your startup, etc.
  - amelius 9y ago
    Yes. And it would be nice if we could train a reinforcement learning algorithm on top of it :)
Double_a_92 9y ago
Step 1: Buy Bitcoins in 2010. Step 2: Try not to cry because you failed at Step 1. T_T
- RationPhantoms 9y ago
  I've found the easiest way to battle FOMO is not to compare yourself between then and now but more like what you would do if you DID purchase the coins in 2010. More than likely, you would sell in 2010.2. There would be about 100 price points where your body would say CASH OUT. Markets are all about taking money from the inpatient and giving it to the patient.
- saboot 9y ago
  I still remember reading about this weird thing called bitcoin on this website around then, I had most of it setup to start mining but got distracted and forgot about it. That is until it hit $100 and I figured 'well it wont get much higher so there's no point now'
maxro 9y ago
This is really cool, albeit a bit high-level and leaves you with the question: ok, what does this actually mean for me? I hate these startup plugs on random threads (genuinely), but here it actually might be helpful for people. At Finimize, we're basically taking all the stuff that Adam is talking about and we're putting it into an algorithm that will tell you what you should be doing – from savings to investments to debt. Like I said, not trying to pitch anything here, but feel free to check it out www.finimize.com/mylife – or ping me an email to hello[at]finimize.com if you want to get a demo (we're still in closed beta). Peace!
- RationPhantoms 9y ago
  Just wanted to give you a quick shout out here. Between you guys and Morning Brew, I get my fill of daily succinct financial news/info.
- nokicky 9y ago
  Finimize subscriber here, love it, keep up the good work :) PS, would love beta access, email sent.
- Y7ZCQtNo39 9y ago
  Can you really boil down all financial decisions to an algorithm? For example, should I pay off a low-interest mortgage earlier with higher monthly payments, or should I invest each marginal dollar in a low-cost index fund? There's certainly a psychological benefit (for some people) to have the mortgage paid off; it's one less bill to keep track of, but of course, over a long period of time such as a 30 year mortgage, it's quite possible that it'd appreciate more than your home (plus mortgage interest) will. Or another question I see asked a lot: Should I take a year off work in my 20s to travel abroad, not knowing how hirable I may be in twelve months, or how the state of the economy might be for hiring early career individuals? It seems half science and half art to me. You can graph and show what decision X vs Y will look like for your finances, showing which will leave you with more dollars in old age, but I do not think that is the difficult question for younger savers today. They wonder, is this marginal dollar I have more valuable spent on an experience today, or should it be invested for tomorrow? It's the opportunity cost of saving. One of your most valuable assets is time, and enjoying the present sufficiently (but not gratuitously) is important for a balanced life. Saving too much or too little will lead to serious imbalances either earlier or later in life. Maybe an algorithm can hint you are savings are too low, or too high, but it can't tell you exactly what to do.
indescions_2017 9y ago
So you've completed CS007. And graduated Stanford. You've even managed to save around $10K in cash from various summer jobs and gifts from relatives. The consensus advice investment management professionals would offer is to sock it away in a well-diversified set of Vanguard Funds. Which you keep adding to on a monthly basis allocated from your paycheck. As well as re-investing any dividends generated. Which will compound nicely over the next thirty years. Leaving you with a $1M nest egg that will provide stable yearly income during your golden years. As well as a decent inheritance left over for the next generation. But I have a really hard time giving this advice to a 22 year old. I certainly didn't heed it myself. Instead I used the cash and spent 100% of it on my own professional and personal development. So, naturally, since this is Stanford and Silicon Valley. I'd include a section on Risk. Taking it. Managing it. What are the rewards. As well as the costs. But with the emphasis the post-graduation 5-10 year window may represent a unique opportunity in your life to take it. And that there are programs such as StartX and YC available to assist should you decide to go all in.
- edraferi 9y ago
  Agree. In your 20s, your main competitive advantage is your ability to take risks. Plus your skill set is incomplete, so you’re likely to see much better returns from investing in yourself than the market.
  - maxro 9y ago
    It's the good old debate on building human capital vs. financial capital.
  - austenallred 9y ago
    Honestly if you’re a Stanford engineer those things aren’t mutually exclusive. You can take big risks and stash some cash. Even in the Bay Area when I was getting paid $120k with a lot of stock and supporting a family I could still put away $2k/month. (Granted, that was after student loans and all other debt were gone).
    - 9y ago
sbuccini 9y ago
This is a class full of engineers from Stanford, many of whom are going to be making $100k+ straight out of college. Yet 92% aren't going to be responsible for any student loans. Wealthy parents? Incredible student aid from Stanford's endowment? Both? Either way, I have a feeling this is one of the biggest advantages they will have in achieving a secure financial future.
- leifaffles 9y ago
  Behavior determines successful outcomes far more than circumstances. Saving $5.5k in an IRA every year for 40 years earning 7% ARR is a retirement nest egg of $1.1M dollars. Median family income is $60k, making this 9% of the budget. Even if you earned say... $25k/yr ($12 per hour) for your entire life, you can afford to save $5.5k per year. There is zero excuse for most people not emerging a millionaire at retirement.
  - lghh 9y ago
    > $25k/yr ($12 per hour) for your entire life, you can afford to save $5.5k per year. Man, I'd love to live in a world where that would be possible.
    - leifaffles 9y ago
      It's extremely rare to live on 25k for your entire life. That's a pessimistic assumption. My point is that even if you do make that for your entire life, you can still get by and build a secure retirement.
      - lghh 9y ago
        > It's extremely rare to live on 25k for your entire life. Not where I'm from or from what I've seen. And my point is that you can't save that amount of money on that sort of salary.
        leifaffles 9y ago
burnt1ce 9y ago
Looks like a fun bird course :)
satran 9y ago
Question for HN: do you recommend any book for personal finance?
- jaboutboul 9y ago
  I will teach you to be rich by Ramit Sethi. Best starting point ever.
- 33W 9y ago
  For basics and a kick in the ass - Dave Ramsey's Total Money Makeover. (Or listen to the Radio show for a bit) Also, the Mister Money Mustache blog for a anti-consumerist viewpoint. Beyond the basics, I haven't read much, but enjoy the Radical Personal Finance podcast. It is a mix of really in depth content, like a multi-part series on disability insurance, and the more "radical" bits, like strategies for living out of your car.
- cmbuck 9y ago
  Unshakable by Tony Robbins. Good background and some nuts and bolts about investing and how to set yourself up for success. The Millionaire Next Door by Thomas Stanley and William Danko. Wealth generation by means of frugality. Thorough presentation of studies and research on America's millionaires what they look like and how they got to where they are now.
deleted 9y ago
[deleted]
hslayer 9y ago
Is there a pdf version of the slides? slideshare blocked here.
i_cant_speel 9y ago
Is there an audio lecture that goes along with this? I'm not seeing anything but the slides.
golemotron 9y ago
This is great but I think a personal finance course should be mandatory for all high school students. It is much more important than the the other curriculum.
JustPassinThru 9y ago
I am neither a professional financial analyst nor a writer, but I wanted to share what I've learned about financial management over the last 25 years with my 18 and 20 year old kids, so I wrote a series of posts called Hacker Finances. I take a lot of liberties with the Hacker notion, but all of the advice is painfully learned and hopefully the kids will read it and profit, or at least avoid major mistakes, when they are ready. https://hackernoon.com/https-medium-com-davisjames-hacker-finances-introduction-14b8283e8677 https://hackernoon.com/https-medium-com-davisjames-hacker-fi...
bungie4 9y ago
Let me make this as simple as possible. The most important thing in personal finance is the delta between how much you net, and, how much you spend. Period. Increase the former, or decrease the latter. Preferably both. You will 'earn' far more in savings by the money YOU contributed than the amount paid to you in interest; unless you have much money over a long enough period of time, and you likely won't.
- tabeth 9y ago
  Pretty much. I think people really want a silver bullet. Spend as little money as you're comfortable with. Invest the rest in an index fund. Wait. That's pretty much it. EDIT: I also should add that the "spend as little money" part does not mean you should necessarily become homeless, or that you shouldn't experiment with things that might help you that cost money.
- corporateslave3 9y ago
  This is a middle class (no offense intended) view of wealth. You wont retire early or get rich from cutting down on 5$ lattes. Investments do accrue over time, but the idea that one should strive to save every dollar will not really help you in the long run. That extra 25k a year does almost nothing for you in the scope of your life. To expand further, what is that saved money really getting you? Over the course of a decade, lets say you have an extra 200k in your pocket, then what? You have the comfort of knowing you can lose your job, but beyond that, what do you get? You will still retire at the same age, you are still locked in the daily drudges of going to work.
- sillysaurus3 9y ago
  And yet it's not at all simple. If you want to avoid sugar and corn syrup, you'll be paying 3x as much on food. You have to remember to cancel all of those superfluous monthly charges. If you get parking tickets, you're set back. If you don't check your physical mail for too long, you'll discover you accidentally ran a toll road and now they're billing you $150. Whenever you get a phone or internet plan, they never tell you what the final bill is, so you have to remember to add +50% to whatever price they're saying. If you live with someone, you have to get them interested in managing finances too, or else you'll discover you're hemorrhaging money. The list goes on and on. If you live in the US, it costs ~$400/mo to have health insurance under the ACA. If you can't afford that and go to the ER for any reason, your credit is screwed.
voiper1 9y ago
"Session 7: Good Investing is Boring" -- excellent title!
k3a 9y ago
Can't they use something better than SlideShare? I can't even display it fullscreen on mobile. Even a stupid old PDF would be far better than promoting this commercial crap.
stefek99 9y ago
Did "CMD + F" to search for "Bitcoin" and "crypto"... Your government is likely to fail, trust in numbers.
the_gastropod 9y ago
This is really an excellent intro to personal finance. I came to it expecting to see the standard "save 10% of your salary" rule that's so pervasive. But this is really thorough. I wish my school had a course like this. Great work!
josephdviviano 9y ago
the key with money/investing is you want to stay alive long enough to get lucky. if you sock away money every month, make sure you have 6 months of living expenses off to the side for emergencies, bet ~20% on crazy things with unlimited upside and the remaining 80% in a very traditional way, you stand a good chance over the very long term. just make sure that when things get rocky you are one of the strong hands and only sell when you want to. as for the dollar values etc ... totally tied to city-specific cost of living ... totally impossible to compare between individuals (e.g., family vs. single, country-specific tax codes, medium and long term financial goals).
juanuys 9y ago
I've been interested in a household finance visualiser recently, but also don't want to upload my bank statements to some random website. This uses IndexedDB, and is pre-alpha and very buggy and feature-less still: https://github.com/opyate/fin https://github.com/opyate/fin Just putting it out there if anyone's interested in Clojurescript/Hoplon and personal finance.

1089 points by destraynor 9y ago

manu-chroma 9y ago

No lecture videos on the link. Just the slides for now.

e40 9y ago
That's too bad. So other item courseware have videos?

aerovistae 9y ago

Why is there nothing for lecture 9: Real Estate? That was the one I wanted to read.

jvehent 9y ago
Because real estate is an illusion when you live in the Bay area?
bdz 9y ago
Not happened yet? >The next seminar will be on Tuesday, November 28th at 4:30pm in Building 200, Room 034.
- aerovistae 9y ago
  i don't read so well apparently
kbart 9y ago
Maybe because it wasn't recorded yet? Check again in few days. "The next seminar will be on Tuesday, November 28th at 4:30pm in Building 200, Room 034."

wil421 9y ago

I think this is really great but IMHO college is too late for this. Personal finance should be taught in middle and high schools just like health classes. When I was 18 and a freshman in college I saw some crazy decisions including using student loans to put a down payment on a car or taking out private loans for spending money.

d3ad1ysp0rk 9y ago
I agree that basic financial ideas should be taught in high school, but people aren't always ready for a deep dive until they've started to be more independent.
- deleted 9y ago
  [deleted]
mstade 9y ago
Absolutely this. We were actually taught basic finances, cooking, cleaning etc when I was in elementary school. They called it "hemkunskap" which literally translated to "home knowledge". I used to think it was useless then, except maybe for the cooking classes – I enjoyed those – but I can trace back A LOT of my deeply rooted knowledge for personal finances and other home skills to those classes. For instance, I moved away from home at age 15 to attend high school in a different town, and all of a sudden I had to deal with a bunch of things I never had to care about before, like weekly budgets and what not. Right then it dawned on me just how useful those classes actually were, and they really did help me out a lot. I wish this had been a staple class throughout my entire stay in school. A lot of the stuff will be repetitive, but that's what it means running a home and a life – a lot of chores that you keep doing over and over, some maybe you'll optimize like hiring a cleaner (after working out it fits your budget!) or investing in technology that just makes things easier. As you grow older, the classes would obviously need to become more advanced, but I think this would go a long way to make kids much more capable to deal with real world problems, and there's a lot of cross over with other subjects as well. I don't know if schools still do this, but when I went to elementary school we had wood working and/or sewing class. I enjoyed those, but we had those for way longer than we had home skills class, and it seems to me these three could be successfully combined.

amsb 9y ago

Fantastic set of topics! As an engineering undergrad at UC Davis, I took a course in engineering law which was incredibly helpful. It's great to see a course in personal finance for engineers. As an entrepreneur building financial services for STEM professionals, I see a distinct opportunity to educate this demographic. While financial education for all demographics is desperately lacking in the US, the STEM crowd has the mathematical training to be presented with a more rigorous treatment of the topics. Moreover, STEM professionals quite often have compensation packages that include complex financial arrangements (e.g. deferred comp.) and/or derivatives (e.g. options) that are difficult to value and/or manage.

shubhamjain 9y ago

Is there any significant benefit of thinking tens of long-term/short-term goals and planning, and managing different funds for them (emergency, travel, house, card, kid's college education..). Why not just have a 1-2 funds to dump your savings in and be smart about withdrawing from it? One could consist of conservative investment vehicles, other could have more aggressive ones.

astura 9y ago
Yes. It makes your funds easier to keep track of (what did you spend your money on?) and it makes overspending very difficult (without noticing). I keep different buckets of money in different accounts with auto deposit.
davidcbc 9y ago
Because when you've got one big savings account it is a lot easier to look at it and say "Oh! I can afford a new car now!" and cash out your entire savings on one thing without taking the other things into account. Having different accounts for different goals keeps a clean separation of concerns. When your car account has enough to buy a car then you can buy it and know you aren't taking away from what you have planned for your kid's college education. If you decide to take money from one account to pay for something else you have to actually think about what you are doing and are more aware of the trade offs.
- jk563 9y ago
  I've found de-coupling to be the key to altering this sort of behaviour. The balance of my savings and investment accounts are separate from my budgeting. I allocate funds at the budget level, the balance of my various accounts being a secondary concern.
50CNT 9y ago
Subdivision like that usually happens when you go from a less complex organic system to something more engineered. Compare this to just running programs, to having 27 different VMs running on a baremetal hypervisor. That serves to subdivide complexity to make it more manageable.

asafira 9y ago

Question for hackernews: where did everyone else learn about this stuff? Going through the material, I found I already knew 50-75% of it, but from bits and pieces of information I learned over the years, not one consolidated place. Is it the same for others?

The_Hoff 9y ago
Go into it with a grain of salt, but https://reddit.com/r/personalfinance https://reddit.com/r/personalfinance is a good resource. The sidebar and recurring themes in posts are really useful. Additionally https://bogleheads.org/wiki/Main_Page https://bogleheads.org/wiki/Main_Page is a good starting place for putting together an investment portfolio.
ryanwaggoner 9y ago
I read a bunch of books on personal finance (of mixed quality) in high school and college, and I also took actual finance classes in college, which help with concepts like compound interest, present / future value, etc.
- sslash 9y ago
  Do you have any particular books to recommend? I've read Money by Tony Robbins. Good book, even though the guy himself is a little too much for me
  - walshemj 9y ago
    The intelligent investor by benjamin graham - Warren buffets mentor
  - davidddavidson 9y ago
    The Bogleheads Guide to Investing
  - sn9 9y ago
    Ramit Sethi's I Will Teach You to be Rich.

amelius 9y ago

Here's an interesting idea, a game environment for testing/building one's personal finance skills: https://challenges.openideo.com/challenge/financial-empowerment-challenge/ideas/the-sims-personal-finance-life-simulation https://challenges.openideo.com/challenge/financial-empowerm...

neves 9y ago
I liked the idea. Does anybody here know about an implementation? I'd like to show it to my sons. BTW, any idea to teach financial info to 11 years old children?
corpMaverick 9y ago
Perhaps one where you do bootstraping ? https://en.wikipedia.org/wiki/Bootstrapping_(statistics) https://en.wikipedia.org/wiki/Bootstrapping_(statistics) And you get to see the effects of random life events. You get cancer, you are laid off, you sell your startup, etc.
- amelius 9y ago
  Yes. And it would be nice if we could train a reinforcement learning algorithm on top of it :)

Double_a_92 9y ago

Step 1: Buy Bitcoins in 2010. Step 2: Try not to cry because you failed at Step 1. T_T

RationPhantoms 9y ago
I've found the easiest way to battle FOMO is not to compare yourself between then and now but more like what you would do if you DID purchase the coins in 2010. More than likely, you would sell in 2010.2. There would be about 100 price points where your body would say CASH OUT. Markets are all about taking money from the inpatient and giving it to the patient.
saboot 9y ago
I still remember reading about this weird thing called bitcoin on this website around then, I had most of it setup to start mining but got distracted and forgot about it. That is until it hit $100 and I figured 'well it wont get much higher so there's no point now'

maxro 9y ago

This is really cool, albeit a bit high-level and leaves you with the question: ok, what does this actually mean for me? I hate these startup plugs on random threads (genuinely), but here it actually might be helpful for people. At Finimize, we're basically taking all the stuff that Adam is talking about and we're putting it into an algorithm that will tell you what you should be doing – from savings to investments to debt. Like I said, not trying to pitch anything here, but feel free to check it out www.finimize.com/mylife – or ping me an email to hello[at]finimize.com if you want to get a demo (we're still in closed beta). Peace!

RationPhantoms 9y ago
Just wanted to give you a quick shout out here. Between you guys and Morning Brew, I get my fill of daily succinct financial news/info.
nokicky 9y ago
Finimize subscriber here, love it, keep up the good work :) PS, would love beta access, email sent.
Y7ZCQtNo39 9y ago
Can you really boil down all financial decisions to an algorithm? For example, should I pay off a low-interest mortgage earlier with higher monthly payments, or should I invest each marginal dollar in a low-cost index fund? There's certainly a psychological benefit (for some people) to have the mortgage paid off; it's one less bill to keep track of, but of course, over a long period of time such as a 30 year mortgage, it's quite possible that it'd appreciate more than your home (plus mortgage interest) will. Or another question I see asked a lot: Should I take a year off work in my 20s to travel abroad, not knowing how hirable I may be in twelve months, or how the state of the economy might be for hiring early career individuals? It seems half science and half art to me. You can graph and show what decision X vs Y will look like for your finances, showing which will leave you with more dollars in old age, but I do not think that is the difficult question for younger savers today. They wonder, is this marginal dollar I have more valuable spent on an experience today, or should it be invested for tomorrow? It's the opportunity cost of saving. One of your most valuable assets is time, and enjoying the present sufficiently (but not gratuitously) is important for a balanced life. Saving too much or too little will lead to serious imbalances either earlier or later in life. Maybe an algorithm can hint you are savings are too low, or too high, but it can't tell you exactly what to do.

indescions_2017 9y ago

So you've completed CS007. And graduated Stanford. You've even managed to save around $10K in cash from various summer jobs and gifts from relatives. The consensus advice investment management professionals would offer is to sock it away in a well-diversified set of Vanguard Funds. Which you keep adding to on a monthly basis allocated from your paycheck. As well as re-investing any dividends generated. Which will compound nicely over the next thirty years. Leaving you with a $1M nest egg that will provide stable yearly income during your golden years. As well as a decent inheritance left over for the next generation. But I have a really hard time giving this advice to a 22 year old. I certainly didn't heed it myself. Instead I used the cash and spent 100% of it on my own professional and personal development. So, naturally, since this is Stanford and Silicon Valley. I'd include a section on Risk. Taking it. Managing it. What are the rewards. As well as the costs. But with the emphasis the post-graduation 5-10 year window may represent a unique opportunity in your life to take it. And that there are programs such as StartX and YC available to assist should you decide to go all in.

edraferi 9y ago
Agree. In your 20s, your main competitive advantage is your ability to take risks. Plus your skill set is incomplete, so you’re likely to see much better returns from investing in yourself than the market.
- maxro 9y ago
  It's the good old debate on building human capital vs. financial capital.
- austenallred 9y ago
  Honestly if you’re a Stanford engineer those things aren’t mutually exclusive. You can take big risks and stash some cash. Even in the Bay Area when I was getting paid $120k with a lot of stock and supporting a family I could still put away $2k/month. (Granted, that was after student loans and all other debt were gone).
  - 9y ago

sbuccini 9y ago

This is a class full of engineers from Stanford, many of whom are going to be making $100k+ straight out of college. Yet 92% aren't going to be responsible for any student loans. Wealthy parents? Incredible student aid from Stanford's endowment? Both? Either way, I have a feeling this is one of the biggest advantages they will have in achieving a secure financial future.

leifaffles 9y ago
Behavior determines successful outcomes far more than circumstances. Saving $5.5k in an IRA every year for 40 years earning 7% ARR is a retirement nest egg of $1.1M dollars. Median family income is $60k, making this 9% of the budget. Even if you earned say... $25k/yr ($12 per hour) for your entire life, you can afford to save $5.5k per year. There is zero excuse for most people not emerging a millionaire at retirement.
- lghh 9y ago
  > $25k/yr ($12 per hour) for your entire life, you can afford to save $5.5k per year. Man, I'd love to live in a world where that would be possible.
  - leifaffles 9y ago
    It's extremely rare to live on 25k for your entire life. That's a pessimistic assumption. My point is that even if you do make that for your entire life, you can still get by and build a secure retirement.
    - lghh 9y ago
      > It's extremely rare to live on 25k for your entire life. Not where I'm from or from what I've seen. And my point is that you can't save that amount of money on that sort of salary.
      - leifaffles 9y ago

burnt1ce 9y ago

Looks like a fun bird course :)

satran 9y ago

Question for HN: do you recommend any book for personal finance?

jaboutboul 9y ago
I will teach you to be rich by Ramit Sethi. Best starting point ever.
33W 9y ago
For basics and a kick in the ass - Dave Ramsey's Total Money Makeover. (Or listen to the Radio show for a bit) Also, the Mister Money Mustache blog for a anti-consumerist viewpoint. Beyond the basics, I haven't read much, but enjoy the Radical Personal Finance podcast. It is a mix of really in depth content, like a multi-part series on disability insurance, and the more "radical" bits, like strategies for living out of your car.
cmbuck 9y ago
Unshakable by Tony Robbins. Good background and some nuts and bolts about investing and how to set yourself up for success. The Millionaire Next Door by Thomas Stanley and William Danko. Wealth generation by means of frugality. Thorough presentation of studies and research on America's millionaires what they look like and how they got to where they are now.

deleted 9y ago

[deleted]

hslayer 9y ago

Is there a pdf version of the slides? slideshare blocked here.

i_cant_speel 9y ago

Is there an audio lecture that goes along with this? I'm not seeing anything but the slides.

golemotron 9y ago

This is great but I think a personal finance course should be mandatory for all high school students. It is much more important than the the other curriculum.

JustPassinThru 9y ago

I am neither a professional financial analyst nor a writer, but I wanted to share what I've learned about financial management over the last 25 years with my 18 and 20 year old kids, so I wrote a series of posts called Hacker Finances. I take a lot of liberties with the Hacker notion, but all of the advice is painfully learned and hopefully the kids will read it and profit, or at least avoid major mistakes, when they are ready. https://hackernoon.com/https-medium-com-davisjames-hacker-finances-introduction-14b8283e8677 https://hackernoon.com/https-medium-com-davisjames-hacker-fi...

bungie4 9y ago

Let me make this as simple as possible. The most important thing in personal finance is the delta between how much you net, and, how much you spend. Period. Increase the former, or decrease the latter. Preferably both. You will 'earn' far more in savings by the money YOU contributed than the amount paid to you in interest; unless you have much money over a long enough period of time, and you likely won't.

tabeth 9y ago
Pretty much. I think people really want a silver bullet. Spend as little money as you're comfortable with. Invest the rest in an index fund. Wait. That's pretty much it. EDIT: I also should add that the "spend as little money" part does not mean you should necessarily become homeless, or that you shouldn't experiment with things that might help you that cost money.
corporateslave3 9y ago
This is a middle class (no offense intended) view of wealth. You wont retire early or get rich from cutting down on 5$ lattes. Investments do accrue over time, but the idea that one should strive to save every dollar will not really help you in the long run. That extra 25k a year does almost nothing for you in the scope of your life. To expand further, what is that saved money really getting you? Over the course of a decade, lets say you have an extra 200k in your pocket, then what? You have the comfort of knowing you can lose your job, but beyond that, what do you get? You will still retire at the same age, you are still locked in the daily drudges of going to work.
sillysaurus3 9y ago
And yet it's not at all simple. If you want to avoid sugar and corn syrup, you'll be paying 3x as much on food. You have to remember to cancel all of those superfluous monthly charges. If you get parking tickets, you're set back. If you don't check your physical mail for too long, you'll discover you accidentally ran a toll road and now they're billing you $150. Whenever you get a phone or internet plan, they never tell you what the final bill is, so you have to remember to add +50% to whatever price they're saying. If you live with someone, you have to get them interested in managing finances too, or else you'll discover you're hemorrhaging money. The list goes on and on. If you live in the US, it costs ~$400/mo to have health insurance under the ACA. If you can't afford that and go to the ER for any reason, your credit is screwed.

voiper1 9y ago

"Session 7: Good Investing is Boring" -- excellent title!

k3a 9y ago

Can't they use something better than SlideShare? I can't even display it fullscreen on mobile. Even a stupid old PDF would be far better than promoting this commercial crap.

stefek99 9y ago

Did "CMD + F" to search for "Bitcoin" and "crypto"... Your government is likely to fail, trust in numbers.

the_gastropod 9y ago

This is really an excellent intro to personal finance. I came to it expecting to see the standard "save 10% of your salary" rule that's so pervasive. But this is really thorough. I wish my school had a course like this. Great work!

josephdviviano 9y ago

the key with money/investing is you want to stay alive long enough to get lucky. if you sock away money every month, make sure you have 6 months of living expenses off to the side for emergencies, bet ~20% on crazy things with unlimited upside and the remaining 80% in a very traditional way, you stand a good chance over the very long term. just make sure that when things get rocky you are one of the strong hands and only sell when you want to. as for the dollar values etc ... totally tied to city-specific cost of living ... totally impossible to compare between individuals (e.g., family vs. single, country-specific tax codes, medium and long term financial goals).

juanuys 9y ago

I've been interested in a household finance visualiser recently, but also don't want to upload my bank statements to some random website. This uses IndexedDB, and is pre-alpha and very buggy and feature-less still: https://github.com/opyate/fin https://github.com/opyate/fin Just putting it out there if anyone's interested in Clojurescript/Hoplon and personal finance.